Argentina’s President Javier Milei believes a new deal with the IMF will eliminate inflation by paying off debts to the Central Bank. He blames high inflation on excessive money supply, following a decrease in central bank assets. A potential $10 billion loan is aimed to stabilize financial conditions. Negotiations with the IMF are reported to be constructive as inflation rates show signs of deceleration.
Javier Milei, President of Argentina, asserts that a new agreement with the International Monetary Fund (IMF) will significantly address the country’s inflation issues. In his recent op-ed in La Nacion, Milei expressed confidence that this deal would enable the Argentine government to manage its debts with the country’s central bank effectively.
Milei attributed Argentina’s ongoing high inflation rates to an excessive money supply, primarily stemming from the declining assets of the Central Bank of Argentina (BCRA). He stated that funds received from the IMF would be instrumental in reducing the government’s liabilities to the BCRA, contributing to stabilizing the financial situation.
The president highlighted his determination to rectify the BCRA’s asset status, stating the goal is for inflation to become a thing of the past. On the prior day of his editorial, Finance Minister Luis Caputo confirmed an agreement on a new financial program between Argentina and IMF staff, which will soon be presented to the IMF board.
Currently, negotiations with the IMF, described as “constructive,” are ongoing. Argentina seeks to finalize the deal within the first quarter of the year, with local reports suggesting a potential loan of approximately $10 billion. The nation grapples with high inflation, recorded at 84.5% year-on-year in January. However, following Milei’s election, inflation rates have seen a decline from 211.4% in 2023 to 117.8% in 2024 as the government takes measures to reduce expenses and manage debt more effectively.
President Javier Milei of Argentina believes a new IMF agreement could eliminate inflation by cleaning up the central bank’s accounts. The proposed $10 billion loan aims to counteract excessive money supply issues. Ongoing negotiations are described as constructive, and there’s optimism for a resolution soon, although Argentina’s inflation still remains critically high.
Original Source: www.firstpost.com
